Noida facility to fuel Medanta's profitability, say analysts; retain 'Buy'

Analysts see nearly 17 per cent upside at current levels and have valued Medanta at a 30x12M EV/Ebitda multiple, arriving at a target price of ₹1,480 per share

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Motilal Oswal Financial Services (MOFSL) has maintained its “Buy” rating on Global Health (Medanta), citing “strong operational momentum and a well-defined expansion pipeline that enhances revenue visibility beyond FY28.”

 

Tushar Manudhane, Eshita Jain, and Vipul Mehta – research analysts at MOFSL – see nearly 17 per cent upside at current levels and have valued the company at a 30×12M EV/Ebitda multiple, arriving at a target price of ₹1,480 per share.

Medanta’s Noida hospital expands regional presence

Medanta’s newly opened Noida facility is positioned as a strategic entry to address the demand-supply gap in the region. “From a service availability perspective, there are 6,000 superspecialty beds available for patients at the industry level. From a demand perspective, hospitals in Noida/Greater Noida have a patient population radius of 250km, including areas such as Western UP, South Delhi, Uttarakhand, Haryana, and Rajasthan,” the analysts noted.

 

The Noida hospital has 226 beds, including 80 ICU beds, and offers healthcare services across 20+ specialties. Medanta already has a strong foothold in North India with hospitals in Gurugram (since 2009), Lucknow (2019), and Patna (2021). On the Lucknow facility, the analysts said, “Utilisation of the Lucknow hospital for patients since the pandemic has enhanced the brand recall of Medanta in North India.”

Noida losses to turn into growth by FY27

“While FY26 earnings before interest, taxes, depreciation, and amortisation (Ebitda) is expected to face a temporary drag due to operating losses from the Noida hospital, which we estimate at INR1.3 billion, we expect Ebitda breakeven within 12-15 months. Profitability is expected to scale up from 4QFY27,” the analysts said.

 

MOFSL projects an overall Ebitda CAGR of 16 per cent over FY26-28, reaching ₹1,400 crore by FY28. Developing hospitals (excluding Noida) are expected to grow at a 21 per cent CAGR, while mature hospitals are projected to grow at 6 per cent.  CATCH STOCK MARKET LIVE UPDATES TODAY

Strong cash flow to support expansion plans

“Operational cash flow from currently operational hospitals, combined with surplus cash of ₹700 crore, would be sufficient to fund the ongoing capex program at Mumbai, South Delhi, Pithampura (Delhi), Guwahati, and incremental capex at existing locations,” the analysts said.

 

Even assuming Medanta’s 1HFY26 operating cash flow of ₹320 crore normalises over the next five years to ₹3,200 crore, they added, “The cumulative ₹3,900–4,000 crore available would be broadly adequate to fund the ₹4,100 crore capex program, including maintenance capex.” 

(Disclaimer: Target price and stock outlook has been suggested by Motilal Oswal Financial Services Limited (MOFSL). Views expressed are their own.)